In April 2008, the Maryland enacted legislation exempting geothermal and solar energy equipment from the state sales and use tax. Geothermal equipment is defined as "equipment that uses ground loop technology to heat and cool a structure". Solar energy equipment is defined as "equipment that uses solar energy to heat or cool a structure, generate electricity to be used in a structure, or provide hot water for use in a structure". Solar energy equipment does not include "equipment that is part of a non-solar energy system or that uses any type of recreational facility or equipment as a storage medium". These distinctions appear to indicate that solar pool heating equipment, and possibly passive solar materials, are not eligible for the exemption.

Two pieces of legislation expanding the sales tax exemption were enacted in May 2009. H.B. 1171 added residential wind energy equipment as eligible for this incentive. Residential wind energy equipment is equipment installed on a residential property that uses wind energy to generate electricity for use in a residential structure on that property. S.B. 621 revised the definition of solar energy equipment to include systems that supply electricity to the grid (e.g., through a net metering agreement). The amendments contained in both laws took effect July 1, 2009.